Inductive Logic and Rationalism offering Flexibility in Approach

Sometimes or perhaps quite often we wonder whether we are doing everything right although our egoistic mindset refuses to budge even an inch from the hardcore ideological stand we had resolved to remain. This is true for most political parties anywhere and perhaps it is this uncompromising stand to remain steadfast in their own carefully drawn out position that either make them their own slaves over a period of time or destroy them due to strong winds of change happening all around them. Since, they do not make themselves flexible even a little they snap and break down really hard and may find hard to come back to their lost glory again. In the case of economics which is heavily mixed with politics it is hard to see a party or the other having definitive stand on their respective isms. This means that these parties either remain rightists, leftists, center-right, center-left and so on. They hardly take a position from where economic policies transcend their political nature and therefore it is narrowed down to political economics than economics for the welfare of the population. In other words, you find several political isms scattered around you, but nothing called humanitarianism. This is the tragedy.

Economics beyond isms

However, of late we do see some flexibility and this augurs well for any economy. In Kerala for instance, we have seen a new economic advisor being appointed by the present government and this is a good policy. After all there is nothing wrong with consulting with experts even if the party has a Marxist base while the new economic advisor is a highly qualified Harvard University professor of Indian origin and comes from a capitalistic nation.

The idea of consulting with any expert should not open doors for undue criticisms, but on the other hand should be seen as a positive step in bringing about greater understanding of the present and future economic scenario. At times consultation in a free and frank manner brings about newer ideas which when intermingled with the society’s existing norms may bring about greater economic and social order.  As stated earlier, the idea is to have better civilized society and not just play around with isms only.

It is in this context that there ought to be more logical interpretation of the society’s needs and wants and better ways of implementation of these workable models so that there are more employment opportunities and better social amenities available for the citizens. The GST, for instance, is sure to be very beneficial for the whole of India in the long run as the tax structure would be such that there would be freer movement of goods and services across the country and much less hurdles that most businesses face in the older system.

Therefore, it is seen that creative inputs from different persons, groups and organization irrespective of their preferences for isms, may go a long way in solving many of the ills that the society faces from time to time. The yardstick for measuring success in the area of social betterment is not based on the uncompromising adherence to certain ideologies or isms, but to a great extent on the flexibility offered to view and review the current economic scenario and to fine tune it with the rapid current economical changes that are taking place worldwide.

Path to human glory

We are passing through a very challenging economical situation where there is rapid automation taking place on one hand and the lack of skilled person for newer jobs on the other. This picture is not incomprehensible, but certainly out of reach for many in the society as to how to address the scenario in a better way as we lack the basic inputs as to how to achieve education and skill development at a very early stage so as to take up this challenge in the best way possible for the overall development of the society. The idea of sticking to a particular ideology or ism may have worked out quite well during the past yet in the current scenario where rapidity of change is so overwhelming that it is but even more absurd as to not even give a cursory glance towards it. Why? This is because of strict unwavering adherence to one or the other isms by political parties.

In this context one thing should be noted and that is surprisingly it is the capitalistic West where respective governments are spending huge money on free health care of its citizens while we on the other hand, the significant majority Indians, rush to private clinics for our health care paying high fees. This is even more acute where there are no government hospitals nearby or if you find one then it is overflowing with patients and facing acute shortage of doctors and nurses and essential drugs.

Why is this so? This is again because we have adopted the skewed socialistic point of development without the proper understanding that there must be taxes paid by the citizens and profits earned by both public and private enterprises. It is this money that can assure the citizens of life time health care and not otherwise as no government remains solvent without hard cash to do so.

As an example, suppose a family of poor people living in a remote village that has crude roads only without proper access and people still have miles to go to get to the nearest clinic, sits circling a female member suffering from some disease then the possibility of getting cured becomes almost impossible. The neighbors too assemble around them emotionally and words like ‘tsk, tsk, che, che and such sounds are heard from others especially the women folks. Some of them cry loudly, aimlessly and relentlessly while others may remark from the bottom of their hearts that they haven’t slept a wink for a few days. So, what of it?

Ultimately, death is surely going to take place due to social, cultural, religious or economic disorders. Here, emotions are not what that counts, but rationalizing the existing situation and then try to make arrangements for the patient to be taken to the hospital as fast as possible. Even if this results in a failure, as it is sure to be, the act of rationalization of the cultural, economical actions and religious conducts of human beings and the civic authorities should be brought in to bear upon the responsibility of attaining well being in all future events before they ever happen. This kind of rationalization or re-inventing is done periodically so that maximum benefits are attained by the society and this is true for all human activities including cultural, religious, traditional, artistic, commercial and economical reasons and this is what actually reforms are.

In short, you must reform your own mindset for any positive feedback to overcome any excesses of negative thinking and resulting outdated actions committed by humans and be always remain in tune with changing times.

Private or government enterprises

It is quite common to see isms tilting either to full free enterprises, semi-government style, co-operative kinds or fully owned large public enterprises. Although, to a great extent isms are propagated by political class and the die hard followers they too earn a taboo of sorts such that deviating a bit here and there would mean outrage. This would then bring a small section of populace to be representative of public anger featuring the good or bad publicity that comes in its wake because they fear their livelihood or confusion of what lies ahead in future or whether everything that they had held as dear has been compromised. Here too it is humanitarianism that counts and rationalization of human acts, be it of any social, economic or political reasons, that give the society the necessary life- work balance  and ultimately for the future mental and physical health of its citizens.

In other words, looking at human population as the prime factor that makes up the society would be in the best interest of all stakeholders for carrying out social, cultural, religious or economic activities. Even if an outmoded or negative dictum is in place in the cultural, religious or economic activities, and is well supported by a significant section of the population, then it ought to be debated, argued and finally publicized or spread out so that the pros and cons of the same is well understood by the masses such that it could be reformed to suit with changing times of the society.

Economically speaking, in so far as the private or semi-government or government enterprises are concerned they remain at best transitory if need be and not inclined to a specific purpose for the sake of ism only. This is because the aim should be for the overall welfare of the population and not for the sake of isms only. In this context one can even find a greater role for Public Private Partnership (PPP) although this may not be the norm in all cases but only for suitable application and implementation of large infrastructure and industrial projects. Yet here too flexibility ought to be exercised and no biasness for a particular ideology, but only those that are given the right kind of flexibility to operate such that in the end results are positive.

What it means in general is that all enterprises whether private or public or quasi must make profit for proper distribution of the same later. In fact, this could be attained by government in the form of taxes or other means. To reiterate this it means that there can be no welfare without having profits that would later flow in as taxes for the government.

Rationalization of the society’s demand and supply

It is therefore quite pertinent to make theories on economics too rationally by taking due consideration of what one experienced on the ground level and what one would like to express it to be the kind it should be. In all my own theories inductive logic and rationalization prevailed all throughout due to my own personal ground experiences and personal researches into the ways and means of the human society. But in all these I threaded into every detail the human aspect of things without, as far as I believe, any tinge of emotions, but simple rationalization.

Emphasizing on the humanitarian aspect of economic activities I could gather a strong base or call it strong premise of argument in order to create the right type of inductive logic and some math to further my argument and to make my points clear. Having done this I was myself led to believe that isms are one way or other a hurdle than a fillip to facilitate my arguments on such a vast subject like economics with human participants at all its levels. Yet, I wasn’t misled by emotions as many would when they argue from the points of view of human beings and this again led me to singularly pursue theorizing on economic activities to suit the society in general and not for any individual, group or part of the populace or ideology.

Needless to say, rationalization was foremost in my mind when I tried to reason with major issues confronting our society and in particular the Indian society. I hope that not much may have gone in vain. While theorizing I was also quite aware of the limitations of certain enterprises and the limitations of ethical conduct of businesses and human beings when confronted with improper interventions and monitoring by superior bodies or government. Thus, for me government’s continued monitoring and interventions were needed for a just society and not the other way around. Yet I also believed relative undisturbed business practices that companies need to improve their business and R & D. Having stated thus I am also a firm believer in giving some sort of support mechanism to small and medium industries in the country for generation of employment and to compete well with that of larger industries.

I firmly believe that de-monitoring and extreme freedom acts as a solid incentive to larger businesses to flourish and expand in the way that is quite analogous to a well armed muscular city thugs taking over the law and order system into their hands and doing what they feel is the best. Naturally, most of the people suffer endlessly due to this and is surely not limited to a few only. Even if there are monitoring and interventions by government and law there is still ample scope for businesses to flourish with a proper system in place that do not wobble every now and then on confusing legalities. Yet I was not always ready to accept the other extreme too when recklessness is unleashed by people to curb the legitimate activities of businesses. It is of foremost importance that businesses and commercial activities that are legitimately carried out survive and flourish so that the government exchequer profit out of it to carry on smoothly the other works of social welfare without the need for looking up at heavens for much needed funds.

In the above context I had come to personally experience that isms have a way of their own to contort and confuse situations and thinking mechanisms of the people rather than involve in proper assessment of problems and their solutions. For instance, in Kerala and so also in other parts of the country a lot of people hide behind isms rather than in doing any greater good for the society.

To emphasize this point well I know a number of people who owned landed properties or gold and large deposits of money inherited or otherwise and who lived a irresponsible, libertine and wastrel life devoid of any public good in the true laissez-faire manner by doing nothing, but simply by selling pieces of assets every now and then and trying to live a lavish life style of their choosing. The matter however doesn’t stop here for these very so called capitalists when they lose all their assets at the fag end of their career suddenly turn Marxists without as much as even a little remorse. If you happen to converse with them they will fume and froth mouthful of scurrilities at capitalism much to your own bewilderment.

In sharp contrast there are people that have arisen from scratch to riches in of course unblemished and legitimate ways and have struggled hard to build enterprises and today are making millions and even billions are strangely seen to be on the wrong side of social acceptance. Surprisingly, these business men also employ a large number of people on a sustainable basis. Again, there are numerous government staffs and bureaucrats who have amassed wealth disproportionately to their known sources of income and yet enjoy all the recognition and social importance that others hardly enjoy. Further, there are groups that consist of employees working hard and some even listlessly in the private sectors that are always at the receiving end of things as far as the society’s paradoxically skewed standards are concerned. Surprisingly, they belong to the largest part of the populace too.

This paradox existing in our society really touched me and necessitated even more that I look at economics and societal activities even more rationally.

Economics as social science than art

Economics is not an art but is more of a social science and there is need for rationalization of approaches towards seemingly less understood human characteristics. As no two people are the same and so making concessions is of great importance to analyze and conclude on a pattern so that, if not the whole population, some relatively large groups are given a general basic approach level so that they mimic in general the aspiration of the majority of citizens and define specified objectives that are positive for the society. Even individual contributions that are positive should be taken cognizant of if they are of good standard and for the positive development of the society.

This would go a long way in formulating policies and monitoring situations for commerce and industries and social welfare. In fact, a standard needs to be set forth in the society to bring varying individuals on a common platform for discipline and implementing benchmarks in attaining standards for education, commerce and industries and of course social welfare. There again may be several groups region-wise or population-wise yet their overall standards of discipline and monitoring ought to be within the gambit of a superior authority that passes the final standards.  

Characteristics of humans differ and so also each individual priority differs, yet from society’s point of view it is the positive commitment and contribution that matters and not any gimmicks or so called negative group assertions with a distinct bias towards a particular group only. Here, in addressing issues one needs to rationalize and not just be carried away by emotions so that what solution is suggested is generally acceptable by the whole community of citizens.

Economics is not an art because to a great extent it cannot be carried away by emotions and general welfare of the populace cannot be confined to emotional outbursts, although initially they may be good, but when it comes to defining standards and addressing issues pragmatically and soundly it needs rationalization for each and every act. Though perfection cannot be attained since it deals with varied human nature and problems it nevertheless has to be capable of setting a rationale for each act that is for the overall benefit of the society. In order to do so there must be solid base of premises on humanitarian grounds for launching arguments that are strong and current relating directly to larger section of the human society. And then to address these issues the tools of inductive logic or reasoning that may or may not include mathematical expressions, as the case may be, has to be theorized to help governments to formulate proper plans.

To douse the social issue fires that have erupted suddenly, you needn’t look for the type of containers or isms, but so long as the humanitarian water is good it would surely help to complete the work it was meant to do. 

Moves that Really Unsettled Marin the Reigning World Champion

Sindhu the Silver medalist did make things look a little difficult for the world champion Carolina Marin and this has been done by the former’s extraordinary performance. There were moves that really unsettled Marin and although she had the competence she didn’t find it at all a smooth sail as is usually the case. This makes P. V. Sindhu exceptionally great as she gave Marin a real run for her gold. Indeed this is a great moment for the country and enough to boost the morale and confidence of all other athletes in India who are still struggling due to general apathy and snobbery. 

Not the least is the achievement of Sakshi Malik who saved Indians from embarrassment. With every day passing at Rio most of us had started skipping over the sports pages of the newspapers. We were already in our customized comfort zone of ‘let it be’ as we knew that the medal tally chart would carry no name of our country. And then this big news that hit headlines made us all sit and imbue hope in all of us.

Thanks to both Sakshi and Sindhu we now can go hoping once more. 

A Very Good Budget for Kerala Given the Constraints

The Budget for the year 2016-17 is really good given the constraints. Why is it so? There has been marked deviation from stereotypical expenses that would or never have made marked improvement in the overall pathetic shape of the Kerala economy or for the common man. Though highly visionary it still gives ample room for the economy to improve rapidly. The very idea of mooting a mammoth infrastructure fund is the real game changer in the budget and quite noteworthy. If well implemented then this could begin a unique mobilization scheme so that many worthy projects could see daylight.

Kerala is paradoxically a place of rich individuals and extremely poor exchequer and this would surely go away if the Kerala Infrastructure Investment Fund Board (KIIFB) is formed with the necessary legislation being carried out. It is highly ambitious and undoubtedly would serve if it is well implemented and given the mandate of the LDF in Kerala it ought to be so.

One should give kudos to Dr. Thomas Isaac (Finance Minister) for this novel idea and especially allocating taxes from the Kerala Motor Vehicles Act. This is indeed a bold step and coming from leftist party with visible conservatism till its last reign this is the luminous spotlight of the budget. Even though the allocation may be only 10% initially and then gradually strengthened so that even 50% of the taxes could be allocated is something that few finance ministers in the country could even think of.

The best thing about this huge fund would be that it would also benefit the tourism to develop beyond the budgeted allocation and so would large projects like hydro electricity and renewable energy resources could be tapped.

There is something shining in this budget after all and should create hope among all Keralites.

Technological Improvement, High Automation and Unemployment (PART II)

This is second part of the essay under the same title written earlier. It has been stated that when higher value is attained the more is the automation process required or carried out and therefore the greater is the unemployment rate. It is also assumed here that there is no change in the demographic pattern in the country and each supply chain is on the process of automation.

In this second part of the series the discussion will range from not just changes taking place in the demographic pattern of a country, but the difficulties that may arise in the labor forces when the transition is made from low skilled, medium skilled to high skilled. In order to throw light into the aspect we will use the same example of the pyramid yet study the same not just on one side, but on all four sides. The pyramid base stands on a square and therefore it has four sides. The structure of the pyramid is therefore more elaborate here as each of its faces or sides shows interrelationship between demographic patterns affecting each supply chain, automations taking place within the supply chains, appropriate skills and training required for the workforce and the government intervention mechanism.

Problems of automation

It has already been shown in the preceding essay how automation may create immense problems for firms in a supply chain when demand for products is tepid and large scale unemployment do not create the necessary aggregate demand for them. Since, many large firms would take the opportunity to automate even faster and faster to lower cost, the end result unfortunately would be squeezing the pockets of the very small and medium industries and employed workforce that eventually exit the scene or remain unemployed and thereby are not in a position to purchase the products these larger firms in the supply chains are producing. This is the vicious circle that leads to recession when the problem is seen spreading to most of the other supply chains in an economy.

(Read Technological Improvement, High Automation and Unemployment (Part I). The figure given below explains how automation would rise in a supply chain where the bottom levels represents very low level automation and the higher up automation reaches its height where eventually only very few people are able to find employment. The Y or Z segment is never reached in the real world yet not quite impossible either.

Again, if several supply chains in an economy resorts to high levels of rapid automation then it will have to bank heavily on exports to enable these supply chains to survive as domestic market may not be able to sustain their purchase. Again, the biggest problem such economies would face is that they would need to come to an unusually long term agreements with lesser automated economies or non-automated economies as the price of their products may be too high for such economies to purchase. Hence, gestation period over a decade or more would be necessary to recover the cost of such products brought forth due to high levels of automation.

Automation again may make it mandatory for economies to resort to bringing in very high skilled immigrants and not just any of the common crowd. This is because of continued upgrading in the levels of higher automation where newer inputs are required and more worthy migrants are needed.

Another problem with automation is that the highly skilled labor force of an economy with specialized skills in robotics may find themselves unemployable in the lower end of the segments namely a, b, c, d or e if  the economy slides down sharply due to recession or depression.

Very high level of automation in an economy that has reached the higher levels of P as shown in the diagram would make the lower ends of the pyramid like a, b, c, irrelevant and immigration of common crowd would eventually prove to be disruptive.

Employed and Unemployed Workforce in Economics

Before going deeper into analysis of automation and its effect on the population of a country there is need to understand what employment is and what constitutes unemployment in its truly economic sense. In economics it is not the whole of a country’s population that constitutes the labor force, but those that seek jobs. In other words, ‘Employed’ means those who seek jobs and get them while ‘Unemployed’ means those who seek jobs and do not get them.

This also means that there are people who form part of the overall population of a country and who do not seek jobs at all. These people do so because they hold some inheritance or are looked after by others who are well employed. These again may be spouses of individuals who do not need to work or those who are covered under a security system or others who are under pension schemes. It is therefore apparent that those who seek are those eligible for jobs and not otherwise. Even self employment is akin to seeking and getting a job to do work on ones own terms.

Here, it is seen that in an economic perspective increase in child births or decrease due to death or increase or decrease in ratio of aged over younger in the overall population has no direct bearing on the workforce other than ascertaining the probabilities of a distant future outcome. This also means that if a country produces children like a large factory may mean nothing as per workforce is concerned. The determining factor of workforce in a partially automated or semi-automated or fully automated economy means quality and not quantity.

It is seen that although aggregate demand and consumption rises where overall population is huge it is unfortunately narrowed down to food consumption and some basic consumption levels only and not quality consumption on all fronts the latter which is instrumental in spiking up activities of production on wider and broader ranges.

Demographic pattern of population with respect to economic activities

A population of a country in economical perspective means that it undergoes changes in relation to the supply and demand of labor or workforce with each stage of automation (non-automation, semi-automation or full automation). Population in economic perspective has nothing much to do with the overall population of a country. For instance, if a person seeks job and trains to do so is said to be a seeker of job. This means that an individual who never seeks anything does not become a part of the workforce nor has the potential of becoming part of a workforce. Hence, workforce in economical term means those that seek jobs and get them and those that seek jobs and do not get them.

In sharp contrast when ascertaining the rate of consumption and aggregate demand the whole of population is taken into consideration and not just the job seekers alone.

From the above it means that when the population increases or decreases with respect to productivity it is only in relation to the level of stress the workforce experiences during work and the transition problems it faces in the economy. Some salient points when there is an increase in workforce population (economically) are as follows:

Increase in Workforce population

·         Increase in skilled and semi-skilled people in the population due to special training and education

·         Migration of labor seeking employment from other countries

·         Higher ratio of working younger workforce population in relation to retired or semi-retired older workforce population. (This has nothing to do with higher levels of overall aged population with that of overall younger population). The unemployed workforce population is still job seekers and includes people with disabilities, people not getting appropriate placements or is reluctant to work due to lower pay.

·         Higher levels of automation in different supply chains rendering skilled and semi-skilled workforce surplus and unemployed.

·         Economic growth stalls or enters negative territory with firms in several supply chains experiencing unutilized capacities resulting in excess labor.

·         Winding up of firms – large and small – increases the workforce population

·         Some part of workforce fails to catch up with the higher level of skill requirements due to improper training and non-standard education rendering them unemployed and thereby increasing unemployed workforce.

Decrease in Workforce Population

·         Decrease in skilled and semi-skilled workforce due to several reasons (educational, economical and political)

·         Decrease in migration of semi-skilled and skilled workforce

·         Higher ratio of retired or semi-retired workforce population in relation to younger workforce.

·         Outflow of skilled or semi-skilled workforce from the economy to other regions or countries

·         Death due to diseases, war or accidents

·         Government rules and regulation in controlling the rapid growth of high automation in supply chains

·         Appearance or creation of newer supply chains in the economy

Transitional stages of automation

Little is heard about automation during its transitional momentum but more is reported about the havoc that automation may create among the general workforce in an economy. It is the transitional stage of automation from one level to another that creates the maximum disruption on the workforce in an economy. Transitional stages occur from lower to higher level segments of the above pyramid. Each pyramid signifies one particular supply chain and not all. As one goes up from c and above then one realizes that in each segment there is greater degree of risks involved in the employment process.

The workforce has to increasingly rely on newer training procedures and education to increase their skills in lieu of the increasing automation introduced within each of the successive segments of the pyramid. As one goes up the segments the narrower is the opportunities available for general workforce or semi-skilled people and only skilled people are able to move up.

During each transitional stage in majority of such supply chains the government has to step in with rules or regulations as discussed in the Part I of the essay. These may be either intrinsic or extraneous interventions or both. If there is no such action then this causes maximum disruption for the workforce and greater pain in transition. Special training and education has to be imparted substantially to these workforces.

Obviously, lesser job opportunities are also available due to narrower segments on the upper levels of the pyramid. It is usually because of higher levels of automation taking place in supply chains. Naturally, the value of goods and services too go up enormously. This is the curse of value concentration.

Growth in relation to workforce employment

Growth in relation to workforce employment can be studied by taking each individual supply chain. There are four sides or faces for the pyramid each side signifying the influence over growth pattern of a supply chain. The four sides of the pyramid are population demographics (Face I), automation process (Face II), education and training for workforce (Face III) and government interventions (Face IV).

The first two sides of the pyramid represent population demographics and automation process and these are namely the Face I & Face II. Given below is the diagram.

Here, in Face I of the diagram each segment of the pyramid symbolizes the workforce increase or decrease when automation is simultaneously carried out as in Face II. Population at a or b segment is representative of ordinary crowd with little or no skills and as the economy picks up there will be shortage of skilled labor for operating basic automation systems and therefore the transition to higher levels of skills and training becomes mandatory and is quite a painful transition for labor as most of them may prove to be incompetent during this transitions. There would also be similar stress experienced when quality immigrants are not there for filling up vacancies.

The transition period of the whole workforce from low levels of skills to higher skills may take several years and in some cases a decade or more. It is also seen that in the higher levels of automation as in ‘P’ segments there is a distinct acceptability of workforces irrespective of their physical and age wise handicaps that are relatively more to be found in the levels of a, b, c, or d.

This means that age and physical disability or gender would prove to be of no hurdle so long as the workforce is highly skilled. Here, skill means more brain power and work associated with greater thinking and imagination and less of physical movements.

Below there is yet another diagram representing the other two faces of the pyramid namely the training and education Face III and government interventions Face IV. Here, in Face III, it would be necessary on part of firms within each of the supply chains to train and educate their labor force to take skills to the next level so as to be able to retain their high performance of productivity. They must also be able to operate the higher levels of automation process as the economy picks up and therefore need to update their knowledge and skills to handle the same.

There is also the need for quicker government responses if several supply chains start off automation in a rapid way.

At higher segments of ‘p’ one would find that it is immaterial if the person is 25, 45, 65 or 75 years of age so long as their brain is working perfectly. Again, there will be as such no differentiation between physically fit or handicapped people as on the higher levels as there is less need for physical movement. Again, there are no gender differences at these levels.

In the above diagram showing Face III & Face IV the Ph signifies the higher levels of ‘P’ while Pl signifies the lower levels of ‘P’. It is at this stage that the transition from lower to higher levels is most painfully experienced by the workforce in an economy. The same holds true for Face I and Face II too. It is also obvious that it is the Face III and Face IV of the pyramid that holds the promise of mitigating the highly stressed workforce and they must be given skilled training and specialized education to enable to go to higher levels.

The government may intervene by looking at the scenario of the unemployed workforce and may even invite non- workforce part (Idle populace) of the population to undergo specialized training and higher levels of education to handle jobs so as to sustain the growth of the economy. More automation may look more promising yet there must be generally significant percentage of population who are at the higher end of the income bracket to sustain high demand and consumption levels including those small and medium industries entrepreneurs. Otherwise, though the firms within each supply chain produces very high value added products there will be no demand to sustain them if unemployment persists. This is the curse of value concentration as explained in the Part I of the essay.

If on the other hand there is need to explore natural resources or products and services that perhaps run for and towards serving the very purpose of automation and robotics due to their unavailability on earth or easier access like that in outer space then this may be sustainable. In this case the motive to run such enterprise should be based on the larger interest and needs of the general workforce as the cyclical pattern suggests that human being create the ultimate demand for goods and services and not otherwise. In future this may happen due to the changes in the lifestyle options of the human beings.

For instance, if several group of people on earth in the distant future at the heights of their robotics and fanciful entertainment spirits start to play real game of star wars with each of their fully automated positions in different moons of Jupiter and Saturn through remote control from earth then an enormous supply chain starts to form. This becomes so huge that the entire GDP of several economies may increase several thousand folds with firms within each supply chain on expansionist phase. However, if these very groups of people change their lifestyle options and think that all this is simply waste of time and energy and they rather meditate and lead a tension free life in peace, then the whole of the supply chain would come to a standstill. But the worst assault due to this would be on the GDP of each of the countries and may be so severe in its magnitude and painful to the workforce population that generations of people or the countries may never be able to recover from the crash and deflation for several centuries. This is the larger picture yet one may be able to understand the smaller picture too from this.

In short, when recession or economic downturn happens it is the highly automated economies that will experience the maximum pain and sufferings than a non-automated or semi-automated economy. This is seen in the upper segments of ‘P’ when the growth slides as seen in the diagram below.

This means that robotics is good so long as it serves immediate needs of human beings, but automation that is stretched beyond that may mean throwing oneself on to the winds of economic and social uncertainties and disasters of future outcomes in the economy.

The Snake and the Pyramid

In the following diagram the snake represents the growth momentum in the particular supply chain while the pyramid has four sides. The growth is spiral form and encircles all the four sides as seen on the coils of the snake.

Here, the snake coil over each segment as it reaches the top stages. In the diagram the snake coil has overlapped another of his coil around the pyramid and this is because of the slump in the supply chain or stagnant growth during that period of time. However, there may be more such overlapping of coil over the other and not limited to just one as in this diagram namely ‘cc’.

It is also seen that the chances of slump are more when automation is increasing and the amount of stress experienced by the workforce is significantly higher.

The government intervention on Face IV is necessary in such cases when the economy experiences downturn. The Face III would be imperative to provide newer tools and education so as to keep the workforce updated on their level of skills and enhancing them further. When the economy is in recession the level of automation needs to be curtailed or workforce population needs to add as in Face II and Face I respectively.

Opening up to FDI is Indeed a Sound Policy for India

Reluctance to do something more or stretching out a bit more is perhaps in our DNA and quite in tune with it our domestic investors that have been laggards. Of course, there have been some improvements yet this is not enough if we are to continue as the fastest growing economy of the world. What one finds is that most private investors were cozy and comfortable with what they already had and taking risk remained much like opening an extra branch for elbow room or another maintenance department outside the existing compound wall of the factory. Nothing unusual was ever devised or installed.

Therefore, throwing open the FDI is really good music. I have been a strong advocate of FDI in certain sectors and less of a fan for FII especially Hedge Funds.

The opening of Indian market would undoubtedly raise the level of competition as well as quality of the products. Then of course would be the easy flow of technology into the country. As for aviation sector you cannot simply listen to traders on the street who may shout something furiously like this ‘ I have been running half a dozen consumer durable showroom professionally and was just waiting for my two sons, one at IIT and the other doing aeronautics to start my own airline.’ Nothing of this sort is ever going to happen.

It is to be noted that the aviation sector is not all that easy to handle as we all have noted even by those high profile domestic investors that had made money from scratch through hardship by selling shoes to liquor. Staying power is very much needed here as no profit would come immediately out of it. The entire system of management and the requisite technology both from managing side as well as the services and maintenance side is enormous. Although not rocket science aviation is still near to it.

So, make in India to happen faster such opening of the market is necessary.

As for the pharma sector there will be good changes in the R & D with investment made there unlike what the domestic manufacturers used to do. As for the opening of the defense sector this was quite imperative as you cannot fight modern wars with outdated weapons. Here, value addition is the prime requirement and not just employment.

The processed food would be good to farmers who want better prices for their products and hopefully they too in the long run contribute to more hygienic food. The middlemen in India are the trouble behind price rise and one has to address this problem one way or the other. Hopefully some part would be addressed this way.

The most important fact is that the Indian economy may see a jump start in investment mood. With Brexit happening India would see faster investment happening while if Brexit doesn’t happen then it would be slightly slower yet India would still be the best investment destination. Investors around the world would like to put money where market is generally stable and growing.

Overall the move is good as at the end of the day employment would be necessary for those in the skilled sector and large companies are better positioned for this. Apart from that the Indian manufacturing sector has been too tepid despite the words ‘make in India’.  Eventually, the Indian industrialists too would try to become more competitive and understand the reason for well established R & D. Again, if huge investments do come in then there will be quicker development of townships absorbing excess labor and unemployed. Besides, it would open potentials for other related services to grow.

Now another thing is to remember here that it is not just the white men with blonde hairs who would come with investments. One can be rightfully hopeful that a large Diaspora of Indians in foreign countries would do so in earnest. Of course, there are quite a good number of rules laid down and the domestic manufacturers needn’t get too worried. Besides, not all sectors are being opened up for as one would hope from the government that labor intensive areas are not subjected to that.

But most of all there must be a stable policy whether the same is in handling the volatility of currency or interest rates or investment policy pattern. Even if there is some flexibility overall structure of the policy should be carried out firmly. For instance, business is not as much attracted to an economy as much as to the well defined stabilized policy. You will note that there are countries that have higher rates of taxes than India yet investors do not complain much, but are happy with a stable regime policy.

Same is the case with black economy. When the investors see that the black economy is not likely to happen in the future due to firm stable policies and rules they will start to divert energy into the white accountable sector although by taking some time.

Rajan did just what was the Need of the Hour

Everything seemed so sudden and confusing about Raghuram Rajan’s exit from the Reserve Bank of India. What went with the government and the RBI governor is still being debated in the media. Yet he did what was right and that is to address the inflation in India which usually hits the ordinary man on the streets quite high. The common man always suffers just with a little increase in prices and the same has to be addressed through monetary intervention. And that is obviously one of the most important jobs of RBI.

Apart from politics the interest rates aren’t too high and the rise in prices ought to be checked from the supply side. This means that monetary policies have their own limitations.  There is good news that the government has started to import food grains, pulses and lentils from the African nations. This is good as that would ensure price stability. This also means that the onus is on the government to reduce the price of essential commodities. This could be stretched to mining products too.

It is to be reasoned that in the short and medium term we may have deficit of trade with most African nations and some South East nations, but that is unavoidable at this juncture. Let that continue and here is the step that politics should get better hand than economics and there should be continuous engagement through our diplomatic routes with these nations so that raw materials for consumers and industries are imported without any hassles. In the long run, of course, we can create parity in trade despite the volatility of politics there.

This would be better if we were to demarcate and emphasize trade data continent wise helping the government to keep in mind the immediate imbalances that may exist especially with African and South East nations. This could be addressed by exports later.

Mr. Rajan did an exemplary job and one hopes that the decision to quit is his own. Perhaps, he may toying with the idea to be a full academic and who knows that we may soon find some great truths in economics brought to light in the course of his brilliant research career.

One of his most remarkable achievements other than containing inflation was his unique ability to stabilize the currency and helping banks to address their NPAs and not in least bringing about reforms in the financial sector which perhaps he may leave unfinished.

Indian Drought and Severe Water Shortages and how to manage it

The drought situation is not just grim, but horrible. This summer things have stretched a little too much and the whole country is witnessing a crisis both on the agriculture front as well as water and irrigation side. Many rivers are flowing much below the levels recorded last year. There are dams, canals and other river beds that have dried up.

There is a pattern in rainfall over the subcontinent or better to say an erratic weather pattern that is playing havoc in the whole of India which has left both the Indian Meteorological Department and the farmers at wits end as to how to predict the weather patterns properly so that the farmers can sow the right seed at the right time.

It is seen over a few years that the El Nino effect has influenced the previous pattern of rainfall over the subcontinent at least. From the look of it the El Nino effect seems to be more predominant every other year and not every year. Last year in 2015 it had a devastating effect while this year hopefully the effect being very low there will be good rain as what IMD predicts.

How to manage water shortages

Rather than dwelling into weather patterns here what is more important from the view point of all Indian citizens is to save the abundant flow or deluge of water during the rainy season. If this time around the rain will be really good then you may see a flow of water everywhere. It is during this time that water management has to be implemented on a national scale. Now coming straight to the point we can consider certain important aspects for thwarting future droughts.

Points to consider

·         Ensure that in each district landscape study is performed under the jurisdiction of each and every panchayat within it or under district level irrigation officials. This can be carried out during the summer itself. Mapping of landscape should be carried out so as to get the low levels and high levels of landscape, river bodies and possible water holes of the local area.

·         This map must be separate from the usual land survey although the latter may be taken as reference. The main highlight of this map should be to specify the rivers, dams, streams, lakes, canals, ponds and other water holes.

·         Ensure that some of the possible water holes are added so as to make them a small catchment area for rainfall during the rainy seasons.

·         All water bodies including ponds, tanks within and outside private and public compounds are marked and given a registration number from the respective panchayats or district level irrigation administration. Each number is unique to each water body and must be having a place in the new map thus formed and may be called ‘Water Bodies Map’ or any other name

·         Further, all such water bodies, small, medium or large must have their registration exhibited conspicuously on the site for future references and surveys. This can be in the form of durable granite stone inscription or wear and tear proof boarding.

·         Bunds or small dams may be constructed to stem the copious flow of water from the rivers draining into the seas in areas specific to the region.

·         Future leveling of these water bodies must get prior sanction from the authorities and cannot be done by free will of the owner or political leader or a public administrator. This kind of sanction may be carried out in the same way when people want to cut down teak or sandal or other vegetation or forest covers even if it is a private property. It then also becomes imperative for all such water bodies to carry a permanent registration number. In the event of faulting over this a hefty fine could be imposed on the culprit.

·         Identifying dried up water holes during hot summer months wouldn’t be a problem for authorities in case of refilling or future maintenance and ensuring water supply from other streams or rivers

·         There will be no special tax levied on such water bodies as the maintenance of it is always for the good of humanity in general and irrigation prospects. All registrations therefore must be done free of cost and the government must bear the expenses.

·         Additional water bodies must be discovered or dug up if there is absence of any water body within a certain area limit with a minimum diameter area prescribed as standard for the region by the authorities.

·         All water bodies, small, medium, large must be carefully surveyed periodically and the authorities must ensure that trees, green foliages are planted and grown at their edges or banks so as to check rapid rate of evaporation during hot summer months. Taking the country as a whole this by itself would ensure millions of cubic meters of water saving annually.

·         Special task force would have to be employed to oversee the judicious use of such water bodies or water holes

·         Any other standard creative inputs from the agricultural scientists and other irrigation experts would ensure good supply of water for posterity. For this the authorities must be open to suggestion and implementation of the same.

Reasons for maintaining water bodies

There are several ground breaking researches that suggest that maintaining a continuous flow of water in the water bodies ensures better ground water availability. Some of the empirical studies by experts and inputs from newspapers and media carry this suggestion. An example that has served as a unique model for all to see may be this. The report has come in the Hindu newspaper some days back.

A little known place known as Channapatna has shown the way where many experts have failed to deliver in the rest of the country. Taking a cue of this unique taluk the rest of the country may take a good lesson for future implementation of schemes. Their may be of course, other Channapatna, but the object of this article is to make sense out of even the worst water scarce lands.

This village has remarkably conserved ground water by replenishing the existing tanks and other water bodies by filling it water on a timely way from the nearby river named as Shimsha. By doing this not only the ground water level have arisen significantly, but bore wells too are full of water some few meters away from the surface when dug. Previously, when such a scheme wasn’t in operation they used to dig about 1200 feet into the depth of earth for drawing water.

The example shows what proper water management system can do to a region, and how to preserve water for future use and irrigation. Of course, not all villages are like Channapatna, but then with proper inputs and creative zeal from our agricultural scientists and irrigation experts a lot of our water problem could be solved in other analogous ways.

For results however all this must be done on war footings for who knows more droughts may still come in the future due to warming up. 

Net Neutrality Mandatory for a Just and Equitable Society

TRAI (Telecom Regulatory Authority of India) is to be lauded for its decision to make the Internet non-discriminatory and open for people of the society. This comes in the wake of extreme pressures from multinationals and giants in the telecom sector where they expect to hand out some sort of condescending doles to the general public initially and then later on charge exorbitantly for any services that the consumers may make use of by using their platform. The TRAI has made the right decision for the Internet is a public platform and not to be monopolized by a few players only.

Why is the Internet no different from the Real World?

The Internet is no different from the real world as it is a virtual world. In the virtual world we do just about carry out a significant part our routine activities and in the future we shall be competing equally with the real world. An entire range of commercial, financial, educational, social and cultural activities are interacted through the Internet before being played out in real life. Therefore, it is not permissible from the point of view of a just and equitable society to allow a few players to dominate and run the whole of the Internet. It is something akin to a few players running the whole of the real world.

In the future we shall see that the real life is not quite different from the virtual world and that almost all activities will be intertwined with that of the World Wide Web. If a few players are allowed to carry out what they feel and deem fit then there will be serious economic and political issue not to say anything about the social life. However, there is nothing wrong with big industries to proclaim long standing passion for the same and there is nothing wrong with the rules and regulations imposed by the TRAI.

It is passion that drives the businesses all over the world and knowingly or unknowingly some organizations may think in lines of becoming slightly bolder or perhaps taking undue advantage of a situation to expand ruthlessly in areas that have not been noticed before. There is nothing wrong in this kind of drive or passion as businesses are sustainable only when promoters and directors are fully engrossed in expansion and profitability as their aim. There is also strong reason to believe that this world otherwise too provides enough opportunity to grow with undying passion at the disposal of men and women who run enterprises successfully.

Yet, rules and regulations and interventions are a must for the society as somewhere along the line some organizations, if not all, may try to transgress into areas that has been marked for betterment of the general populace or a social order platform that is the foundation for providing an equitable and just society. We shall see it in an example below.

Case of the Coir Manufacturer

Couple of decades back I happened to meet a coir manufacturer at his showroom at Kochi in Kerala for some official purpose. He had a manufacturing unit somewhere far and the showroom was full of artifacts, furniture, souvenirs, works of art, statues and other showy items all made in coir. He was bubbling with enthusiasm as he narrated his little story of becoming quite successful in this area. Finding that I too had become excited and all attention he quickly showed me many more products made out of coir.

Soon he was showing me sketches and his passion for it was all too obvious to me. He later showed me a dog kennel made of coir, a prototype of large house that he said could be constructed entirely out of coir materials alone. He also told me if the government or the corporation so wanted he could construct parks, street lights and pathway out of coir as the main material. Except for the wiring all other parts including insulation and stands could be made out of coir for the street lighting. Here, his enthusiasm knew no bounds and I couldn’t help thinking jokingly that he perhaps even ate coir for lunch and dinner. In other words, to say that this man was passionate would be an underestimation.

However, while his passion was great he would surely transgress the boundaries of a calm society if her were allowed to build the street lights. In fact, it would need only a tiny spark from the electric line somewhere to burn the whole thing into ashes in no time. Coir is very inflammable. This is where the regulatory authorities step in and where rules and regulation are imposed so that the passion may be channelized into other areas which do not harm the general public.

So the TRAI has done the right thing. The Internet is for all and definitely not for a few to manage and profit out of it.